What are the fines, imposed, when it's determined that an employee is legally an employee and not a 1099 contractor in the state of Michigan?
What are the fines, imposed, when it's determined that an employee is legally an employee and not a 1099 contractor in the state of Michigan?
Since this is a federal issue, its not governed by state law:
What Can Happen If a Worker is Improperly Classified?
If you improperly classify an employee as an independent contractor, you can be liable for:
additional state and federal income taxes
unemployment insurance penalties
workers compensation penalties
lawsuits by workers for unpaid wages
criminal fraud
Frankfurt Kurnit Klein & Selz PC
There are no set fines, its handled on a case by case basis.
If you are the employer, your best bet is to hire an ex-IRS agent to help you out of the mess without paying whopping penalties. There are many of them who specialize in this subject.
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